If you are behind on one or more of your student loan payments, it is important that you understand what your options are in terms of student loan repayment plans. While each plan has its benefits, not every student loan repayment plan is right for you. You need to ask yourself which option will best meet your needs while still offering you the financial security you need. Here are some of your options and what they may mean to you.

Under all four federal student loans, if your current loans are not fully repaid by the end of your current repayment period, the remaining loan balance forgiven is forgiven. For any income driven repayment plan, grace periods, minimum payment periods, and other periods of financial hardship deferment will count toward your overall repayment period. This period is also used to calculate your monthly income and to determine your monthly payments.

In a standard income-driven repayment program, your loan servicer will set up your payments to start at a specific amount, with a predetermined interest rate. The loan repayment period is then based on the loan term. If you wish to shorten your grace period and lower your payments, you can talk to your loan servicer.

A short income-driven repayment program allows you to choose either a fixed monthly payment amount or a flexible monthly payment amount. With a fixed monthly payment amount, your interest rate is set at the same level as your loan’s interest rate; if you wish to change this rate, you can do so up to twelve months prior to your loan’s maturity date. If you want a lower interest rate but cannot change your loan term until after twelve months, you can use a flexible monthly payment amount that allows you to adjust your payment amount up or down throughout the grace period. You do not have to pay the full amount of your loan until the grace period is complete; however, if you do extend your loan term, you will be charged an extra fee.

There are two types of income tax deferment options available to you. The first type of income tax deferment is referred to as the installment plan. Under this option, your interest starts tax free immediately; however, you will not receive any relief on federal income taxes until the first month of your loan’s payment is completed. The second option is referred to as the installment agreement. Under this plan, you agree to pay a portion of your loan’s interest and to pay taxes only on the amount of the loan that is paid in a lump sum.

To qualify for federal student loans, you must qualify for one or both of these alternative documentation requirements. If you do not meet the specific requirements, you may still be able to qualify for loan forgiveness. To find out if you do qualify for federal student loans’ loan forgiveness programs, contact your servicer. Your service is likely to offer several loan forgiveness options based on various factors, including your financial history, employment history, and family circumstances.

A major benefit of income-driven plans is that they provide flexible monthly payment amounts. For most borrowers, federal student loan repayment plans with flexible monthly payment amounts are the best repayment plan options available to them. When your payments are set at a level that you can afford, it makes it much easier to pay them off.

Another option that you have with income-driven plans is the ability to set payments to a fixed amount. If you choose to go this route, you may be subject to a graduated level of income-based repayment. The first level of repayments (or income-based plans) will be lower than the level of payments you would receive if you continued with the traditional 12-month standard repayment plan. If you meet all of the other requirements for eligibility for the ICR plans, you may also qualify for reduced interest rates on your federal student loan.